Extension of Movement Control Order (MCO) – 1 April 2020 to 14 April 2020

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Extension of Movement Control Order (MCO) - 1 April 2020 to 14 April 2020


What is the assistance offered to employers?


Bank Negara Malaysia issued a six month moratorium on the repayment of loans and financing. Please check with your respective banks.


Wage Subsidy Program (Amendment). Under this additional initiative, all employers will receive a subsidy as below for 3 months (per employee) provided these following conditions are met:-

1. For companies with a workforce of more than 200 people, a wage subsidy of RM600 per month for every retained worker.

2. For companies with employees between 76 to 200 people, a wage subsidy of RM800 per month for every employee.

3. Finally, for companies with employees of 75 people and below, a wage subsidy of RM1,200 per month per employee.


Conditions of eligibility

• Employers must show a decrease of 50% or more than in total sales or income compared with January 2020 or the following months (not required for companies with employees of 75 people and below);

• Employers and employees must be registered with and contributing to SOCSO.

• Employers have registered with SSM (Companies Commission of Malaysia) or Local Authorities (PBT) before 1st January 2020.

• Employers should be start operating before 1st January 2020.

• Eligible to employees earning RM4,000 and below.

• For employers who choose to receive this assistance, they are required to retain their employees for at least 6 months, within 3 months while receiving a wage subsidy and 3 months thereafter.

• With effect from 1st April 2020.


How to apply

Applications must be submitted by the employer through the website prihatin.perkeso.gov.my starting 9th April 2020.


The deadline for applications

On 15 September 2020 or subject to the balance of funds allocated or any decision by government.


Payment method

The wage subsidy payment will be credited to the employer’s account within 7-14 days from the date of approval.


Who is not eligible to apply for the wage subsidy program

• Employers who began operations after 1 January 2020;

• Employers and employees who have are not registered with or contributing to PERKESO;

• Employees who have received the financial aid under the Employment Retention Program for the same months;

• Employees who are earning above RM 4,000 a month;

• Employees who have already been dismissed;

• Civil servants or employees of statutory bodies and local authorities;

• Foreign employees and trade officers; and

• Those self-employed, including freelancers.


Documents required for this application

1. The list of employee name (according to company size eligibility limit);

2. Employers bank account information (bank statements, copy of the front page only);

3. Information of Business Registration Number (BRN) registered by the employer at the time of opening the bank account is as in (ii) above. Please consult with bank;

4. Copy of SSM / ROS / ROB / services authorities of professional, scientific or technical / Business license;

5. Declaration Form PSU50; and

6. Supporting documents such as financial statements or sales reports that have been verified by management or other related documents (for companies with 76 employees and above).


Do employers have to submit an application the following month for further claims?

The employer does not have to submit the new application. However, employers are required to update information changes for the second and third claims in the event of any change to the business status or number of eligible employees through the system. Failure of the employer to not report such change may result in legal action.


How the employer will be able to determine whether the application has been approved or rejected

Employers will be notified by email and a list of approved employers’ names will also be displayed on the SOCSO web eiscentre.perkeso.gov.my including the number of approved employees.


Employee Retention Program (ERP) – Immediate financial assistance of RM600 per month for workers who agree to take unpaid leave where their employer experiences economic losses as a result of COVID-19 beginning March 1, 2020, a minimum of 30 days between 1 and 6 months (mutual agreement between employees and employers). Monthly salary eligibility is RM4,000 and below and must be registered with the Employment Insurance System (EIS).


Applications must be submitted by the employer beginning March 20, 2020 using the ERPC-19 Application Form and can be uploaded via www.perkeso.gov.my. The completed form should be emailed to e rpc19@perkeso.gov.my.


The ERP payment will be credited to the employee through the employer within 7 days after the employer receives payment from SOCSO.


Introduction of Employer Consultation Services by the Employees Provident Fund (EPF) on 15 April 2020 for services on restructuring of employers’ EPF contribution.


To reduce the levy on foreign workers by 25% to all companies with work permits that will expire in the period of 1 April to 31 December 2020. This reduction is not applicable to the Domestic Servant.



What is the assistance offered to employees?


Bantuan Prihatin Nasional – Giving cash for one-off as below:-

• RM1,600 to households earning RM4,000 and below. RM1,000 will be paid in April 2020 and Balance in May 2020 RM600.

• RM1,000 to households earning over RM4,000 to RM8,000 to be paid in April 2020 of RM500 and the remaining RM500 to be paid in May 2020.

• RM800 to single individuals aged 21 and over and earning RM2,000 and below. A payment of RM500 will be paid in April 2020 and the remaining RM300 will be paid in May 2020.

• RM500 to single individuals 21 years of age and monthly income of RM2,000 to RM4,000. The RM250 payment will be paid in April 2020 and the remaining RM250 in May 2020


Private Retirement Scheme or PRS

Allows withdrawals from Private Retirement Scheme or PRS from account B up to a sum of RM1,500 per member without any tax penalty during the period April 2020 to December 2020.


Moratorium on loan repayments for six-month (April 2020 until September 2020)

Determent of bank loan repayment (stop paying) starting April until September- 2020



What are the changes in payroll?


Levy (HRDF) exemption for all registered employers for a period of 6 months starting from March 2020 – August 2020 Levy Payment.


PTPTN Loan repayment deferment period extended to six Months starting from April to September-2020 payroll.


Reduction of Employee Contribution Rate From 11% to 7% will be Effective on April 2020 (May 2020 contribution) and end December 2020 (January 2021 contribution).


Determent of bank loan repayment starting April until September-2020 (e.g. Bank Rakyat)


Remarks: Loan repayment through salary deduction


Referring to the Additional Economic Stimulus Package, the Government encourages employers to actively engage with their employees on employment terms including the options of pay cuts and unpaid leave during the MCO period. Employers and employees may refer to the Department of Labour to seek advice on solutions for issues raised. Any negotiations should be subjected to employment laws currently being enforced. What is important is that the rights and welfare of both sides are taken care of.



HR Ministry MCO guidelines


Q. Does employer need to pay salaries to employees during the 14 days Movement Control Order (MCO) extension which started from 1st April 2020 till 14th April 2020?

A. Yes, all salaries and fixed allowances are required to be paid to employees except for allowances that are related to attendance/travelling (which are NOT being performed during that period).


Q. Can employers advise their staff to apply for Annual Leave or directly deduct employee’s Annual Leave during the extended Movement Control Order (MCO)?

A. No, the employers can’t force their employees to take Annual Leave during the extended Movement Control Order (MCO) as Annual Leave is granted or to be deducted upon the will/request by employees.


Q. What are the actions that employers could take during the extended Movement Control Order (MCO)?

A. During MCO, employers are advised to follow the below actions:-

1. Employers must pay their employees full salaries and all eligible allowances during the extended Movement Control Order;

2. Subjected to agreement from both parties, employers could offer their employees as per: Full paid leave Half paid leave; or Unpaid leave

3. If retrenchment actions are required, employers can refer to the Retrenchment Guidelines. Retrenchment Guidelines and Employment Retrenchment Notification form (Form PK) is available in JTKSM website:- (www.jtksm.mohr.gov.my)


Q. What actions can be taken by employees if the employers does not follow the above?

A. Employees may go to the nearest Labour Office to lodge a report.


Q. Can employers perform Retrenchment process if their businesses are affected by the COVID-19?

A. Retrenchment is a way to cut down excess overhead labour in the company. In general, the Retrenchment process is the prerogative of the employer. However to ensure that the Retrenchment process is fair to all parties, these are the 3 key things employers need to adhere to, namely:-

• The reason for the employer’s business affected by COVID-19 should be genuine;

• Employers are required to avoid retrenchment of work first such as reducing work hours, limiting or restricting the hiring of new employees, limiting overtime, limiting work on weekends or public holidays, reducing employees’ salaries, implementing temporary layoffs (lay-off); and

• If Retrenchment process is unavoidable, foreign workers needs to be terminated first. The principle of LIFO (Last in First Out) must be adhered if it involves local employees during the Retrenchment process. However this principle can be ignored if the employer has a strong justification for not doing so. The employer must report to the nearest Labour Office thirty (30) days before the date of Retrenchment. The employer can get Retrenchment Guidelines and Employment Retrenchment Notification form (Borang PK) in JTKSM website (www.jtksm.mohr.gov.my)


Q. What actions can be taken if there’s a COVID-19 suspect or positive employee?

A. Employer should direct all employees who work closely with the employee to stay at home for a period 14 days to ensure that it does not spread to others. Prior to that, the said employee are required to identify all individuals who are close contact (three to six feet) with them on the past 2 weeks before being suspected. By doing so, the employers will have a complete list of the individuals who are at risk. Employers must maintain confidentiality without leaking personal information of the said employee. In addition, the employer must perform disinfection process at the working spaces affected. If the workplace is inside a building or shared office area, the employer involved should inform the management of building so that they can take precautionary measurements accordingly.


Q. Can foreign workers who holds a Temporary Employment Visit Pass (PLKS), Employment Pass (Expatriate Pas), and MM2 return to their origin country?

A. Yes and it will be subjected to the conditions set by the Immigration Department of Malaysia. Please contact KDN Operations Room at 03- 8886 8110 / 03-88868126 for more information.


Q. If there’s an employee confirmed with positive CONVID-19, can employers grant unpaid leave to all employees?

A. Employers can provide leave to other employees in order to ensure the safety and health measure of other employees. The leave granted to employee shall be a paid leave and not unpaid leave. Employers are not allow to force employees to go on unpaid leave.


Q. What can be done by a daily wage employee during the period of Movement Control Order (MCO), if no salaries is being paid?

A. Please refer to the FAQ’s under Employment Retention Program (ERP) issued by The Social Security Organization (SOCSO) at 1300-22-8000 or visit: www.perkeso.gov.my


Q. What actions can be taken if employers’ falls under the Non Essential Services category but still operate without an exception letter from the Director of Health (MOH)?

A. Any personnel can lodge a report to PDRM/RELA/JTK/Occupational Safety and Health Department.


Q. What actions can employee take if there’s employer who does not comply with the Movement Control Order (MCO)?

A. Employees can lodge a report to the Police, RELA or Ministry of Human Resources (MOHR).

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